Rupee gains from FCNR (B) boost reverse in September amid higher crude oil prices: RBI bulletin — SkimNews
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- Rupee gains reversed as FCNR(B)-driven early-September recoveries gave way to renewed depreciation from rising crude oil prices, per the Reserve Bank of India's Poonam Gupta.
- Crude oil climbed back above $100/barrel this week after US and Iranian leaders exchanged barbs at the UN General Assembly, with Brent up more than 70% for the year.
- RBI's capital flow measures brought in $143.5 billion as of September 18, with FCNR(B) deposits accounting for nearly $133 billion — prompting the early closure of the scheme one month before its September 30 deadline.
- The Indian rupee depreciated 0.7% in September and was trading at ₹95.82 per US dollar, down nearly 7% in 2026.
- Deputy Governor Gupta described the past 18 months of rupee depreciation as a possible "overcorrection" and argued there is a "fair case" for the currency to stabilize or even appreciate.
- India's June capital flow measures helped the country record a "meaningful balance of payments surplus," per Gupta, reflecting India's ability to attract inflows at a small country premium.
Why it matters: India's RBI deployed $143.5 billion in capital flow measures that briefly propped up the rupee, but with Brent crude up 70%+ this year on the West Asia conflict, the currency remains exposed — down nearly 7% in 2026 at ₹95.82/USD. Deputy Governor Gupta's "overcorrection" framing signals the central bank views recent weakness as excessive and sees a "fair case" for the rupee to stabilize or appreciate.
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